Small lenders fall into line on investor lending policies 02 July 2015 3:56PM John Kavanagh Smaller lenders and mortgage managers have fallen into line with the big banks, tightening their underwriting for residential property investor loans.Comparison site Mozo reports that Aussie Home Loans, eMoney, Firstmac, Homeloans, iMortgage, UBank and Yellow Brick Road all made changes in June that will restrict the volume of investor housing finance.Aussie and Yellow Brick Road have added ten basis point premiums to their variable rates on investor loans. eMoney and Firstmac have added 15 bps to their investor loan rates.Homeloans is charging an extra 30 bps for loans with loan-to-valuation ratios under 80 per cent and 15 bps for loans with LVRs over 80 bps.iMortgage is charging an extra ten bps on its variable rate loans and 15 bps on fixed rate loans.UBank has restricted the availability of its special standard variable rate (currently 4.09 per cent) to owner-occupier borrowers. The investor rate is 4.42 per cent.The changes are in response to a call from the Australian Prudential Regulation Authority for lenders to limit the growth in their investor mortgage portfolios to an annual rate of ten per cent.Throughout May the big banks made a number of changes to their underwriting standards. Westpac is no longer making package discounts available to investors. The bank also raised its loan serviceability hurdle, increasing the minimum assessment rate 30 basis points from 6.8 per cent to 7.1 per cent.ANZ and NAB are only offering investors advertised variable rates, with no price discretion.Commonwealth Bank closed a A$1000 investment home loan rebate offer and reduced pricing discounts for investment home loans. CBA subsidiary Bankwest imposed a loan-to-valuation ratio cap of 80 per cent on investor mortgages.